Survey

The inflation rate now seems to be going down. What will you try first to handle new price announcements?

Accept any change.
Negotiate any increase to less than 5% increase.
Shop for a lower cost supplier.
Negotiate to postpone any increase.
Ask for a price reduction.

Today's Tips


Ten False Assumptions To Avoid - 07/01/2010
Those who may make the following assumptions prevent the best possible purchasing performance. In each case, the stated claim may be true, but it is just as likely to be false. Continual testing and comparison in the marketplace is the only way to ...

Never Assume You Have the Lowest Cost - 06/01/2010
Good buyers are proud of their ability to negotiate, and well they should be. The ability to negotiate well is a valuable skill honed by education and experience. But the danger lies in assuming you have achieved the lowest possible obtainable cost...

Try a New Approach - 06/01/2010
It is human nature to get into a habit of doing something the same way day after day, year after year. Most people drive to work by the same route every day. Most eat the same foods. Most read the same material. Few change their habits about entert...

Clarify Transportation Cost and Other Extras - 04/01/2010
Make sure you include all the costs when comparing suppliers. If you don’t measure anything but the product price you may be awarding business to the wrong supplier. Suppliers will frequently bid with a stated price for the product but be vague a...

Return Excess Inventory to Vendors - 02/01/2010
The usage of certain items, particularly MRO items, can change over time without the buyer being aware of the change. The change can be the result of different equipment being used, different employee preferences, and changes in methods. For instan...

Avoid the Free Lunch - 01/01/2010
The graduate schools of business and economics preach "there is no free lunch." Psychologists will probably agree that in most cases this is true. However, those buying the lunch or receiving it may not see it that way. Those who are buying may bel...

Frauds and Cons Abound - 11/01/2009
Professional buyers are expected to be on alert to cons and frauds, but it is easy to be taken in. Con artists, as the name implies, are clever in deceiving even the most sophisticated among us. Buyers are likely to be vulnerable because they are ...

Get Your Authority To Purchase In Writing - 10/01/2009
If you are a purchasing manager for an organization, when you were hired you were given authority to buy for that organization. The specifics of what you could buy and the amount you could spend may or may not have been mentioned to you. You may ha...

Combine Requestors' Needs to Reduce Cost - 09/01/2009
One of the advantages of centralized purchasing is to obtain a reduction in cost by combining the needs of more than one location. This provides economies of scale and allows the buyer to obtain discounts from larger quantity orders. But even if yo...

Always Have a Backup Supplier Ready - 08/01/2009
If you wait until your single source supplier goes out of business before looking for a second source it is usually too late to prevent a costly problem. Today more than ever, be prepared to change suppliers if necessary. Both personal and business...

Use the Preemptive Strike - 05/01/2009
Using a preemptive strike to avoid a price increase announcement can prevent one, but it can also initiate one. In other words, being proactive by asking a supplier for a price reduction or other concession may make a supplier reconsider asking for...

Placing Orders Is Not Enough - 04/01/2009
When managers in most organizations measure the performance of the purchasing function and the achievements of individual buyers, they don’t consider order placement alone. Almost anybody can place orders, even without much training. Placing ord...

Now Is The Time To Reduce Prices - 12/01/2008
The other day one of our members said he could not save much from his purchasing effort because of the bad economic climate. This buyer may have forgotten some of the principles of economics. Normally, when sales decline, business is more willing t...

Lower Your Costs By Helping Suppliers - 11/01/2008
The nation’s financial crisis has resulted in tightening of both business and consumer credit. Many businesses cannot even obtain short term loans which they routinely depend upon to conduct business. Businesses of all sizes, but especially smal...

Beware of Blanket Price Changes - 09/01/2008
Suppliers announce price changes in various ways. Seldom do they ask the buyer in advance if a price increase will be accepted. Normally they announce an increase by a letter, or in a revised catalog, or sometimes preceded by one or more public ann...

The Value of Inspection and Minimizing its Cost - 08/01/2008
It is wise to inspect a purchase product either before delivery or before acceptance. Inspection can be made at the supplier’s facility or at the buyer’s location. For international purchases, outside organizations can be hired to conduct inspe...

Plan to Imrove Your Purchasing Operation - 08/01/2008
It is easy to get caught up in routine activities when you are manager of the purchasing function. The demands of the job keep all of us busy. There are requisitions to clarify. There are salespeople to interview. There are suppliers to locate for ...

The Importance of Membership Renewal - 06/01/2008
Keeping your membership in the American Purchasing Society is a wise thing to do. It makes sense professionally and economically. Membership helps your career by indicating you are interested in your profession. Membership in APS provides informati...

Standardization Saves Buying Time - 05/01/2008
There are two types of standardization that save a significant amount of time spent buying. The first is standardization of products purchased. Limiting the number of approved products for purchase within the organization has multiple advantages. ...

Beware of Charges Not In the Buying Agreement - 04/01/2008
The purchase agreement should consider all charges that will be made. To properly evaluate the total cost of the transaction, your calculations must include all charges. This seems obvious, but it is common for suppliers to not tell you about certa...

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